FOREX-Dollar index edges higher; bitcoin zooms above $13,000 – Finance News

* Optimism about progress on U.S. tax supports greenback

* Bitcoin rockets above $13,000
(Updates prices, market activity; adds comments)

By Saqib Iqbal Ahmed


NEW YORK, Dec 6 (Reuters) – The dollar edged higher against
a basket of major currencies to hit a two-week high on
Wednesday, as market participants grew more optimistic about
lawmakers’ progress on U.S. tax legislation.

The dollar index, which measures the greenback
against six rival currencies, was up 0.18 percent at 93.547.

“The dollar is finding some support on expectations that
Congress is going to pass tax legislation sometime this year,”
said Sireen Harajli, FX strategist at Mizuho in New York.

The U.S. Senate voted to go to a conference committee to
resolve differences between its tax legislation and a rival
version passed by the House of Representatives, moving the
Republican-led Congress a step closer to a final bill.

The dollar index moved higher after data from a payrolls
processor showed U.S. private-sector employment growth eased in
November even as the manufacturing sector added the most jobs in
at least 15 years.

The dollar was 0.36 percent lower against the Japanese yen.

“A flight to safe havens is underway at the moment,” said
Karl Schamotta, director of global product and market strategy
at Cambridge Global Payments in Toronto.

“The potential for a U.S. government shutdown is
intersecting with worries about the long-term geopolitical risks
associated with Trump’s recognition of Jerusalem as Israel’s
capital to push money into the yen,” he said.

President Donald Trump abruptly reversed decades of U.S.
policy on Wednesday and recognized Jerusalem as the capital of
Israel, generating outrage from Palestinians and defying
warnings of unrest in the Middle East.

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The yen tends to benefit during geopolitical or financial
stress as Japan is the world’s biggest creditor nation and there
is an assumption that Japanese investors will repatriate funds
should a crisis materialize.

On Wednesday, Trump also raised the possibility of a U.S.
government shutdown by week’s end – blaming Democrats for that
possible outcome – one day before he is due to host Republican
and Democratic congressional leaders for talks on a spending
bill.

Bitcoin extended its rally, breaking above $13,000 to a
record high despite questions about the cryptocurrency’s real
value and worries about a bubble.

Sterling touched a one-week low in volatile trading amid
growing concerns that a Brexit deal may be unlikely before next
week’s key European Union summit.

The Canadian dollar fell against its U.S. counterpart after
the Bank of Canada held interest rates steady and showed enough
caution to dampen expectations for a hike early next year.
(Reporting by Saqib Iqbal Ahmed; Editing by Meredith Mazzilli
and Lisa Shumaker)

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